A futures contract is a contract to purchase (and sell) a particular asset at a fixed price in a future time period. There are two parties for every futures contract - the seller of the contract, who agrees to bring the asset at the particular time in the future, and the buyer of the contract, who gives consent to give a fixed price and take delivery of the asset. If the asset that underlies the futures contract is traded in the market and is not perishable then you can build a pure arbitrage if the futures contract is mispriced.

 

 

Posted Date: 7/25/2012 7:46:21 AM | Location : United States

Ask an Expert

Related Discussions:- Future arbitrage, Assignment Help, Ask Question on Future arbitrage, Get Answer, Expert's Help, Future arbitrage Discussions

Write discussion on Future arbitrage
Your posts are moderated

Write your message here..

Related Questions

Explain swap dealer, Explain Swap Dealer A swap dealer is a market make... Explain Swap Dealer A swap dealer is a market maker of swaps and predicts a risk position in matching opposite sides of a swap and in making sure that every counterparty fulfil

Evaluation of credit policy, Q. What is Evaluation of Credit Policy? Ev... Q. What is Evaluation of Credit Policy? Evaluation of Credit Policy: - A credit policy is prepared to maintain the investment in receivables at optimum level. Receivable Turnov

Example on modigliani and miller approach, Q. Example On modigliani and mil... Q. Example On modigliani and miller approach? The subsequent is the data regarding two companies X and Y belonging to the same risk class: Company X

risk associated with working capital, w risk associated with working capit... w risk associated with working capital

Briefly explain suppliers and customers, Suppliers and customers Suppli... Suppliers and customers Suppliers as well as customers are external stakeholders with their own set of objectives profit for the supplier and possibly customer satisfaction wit

Assets allocation, Assets Allocation: The investment pattern above shou... Assets Allocation: The investment pattern above should be followed as under: Fresh accretions to the fund and redemption amounts of investments made earlier should be inv

Financial management issue, Harrelson Inc. currently has $750,000 in accoun... Harrelson Inc. currently has $750,000 in accounts receivable, and its days sales outstanding (DSO) is 55 days. It wants to reduce its DSO to 35 days by pressuring more of its custo

Ratio analysis and company valuation, As an investment advisor, you have be... As an investment advisor, you have been approached by a group of professional investors (probably who already have a well-diversified portfolio). They are considering investing in

Basic concepts of assessing trading strategies, Leveraging can be described... Leveraging can be described as an investing principle where borrowed funds are invested in a part of the securities. Leveraging can magnify either returns o

HOW TO MANAGE FINANCES?, What are the strategies in managing your finances?... What are the strategies in managing your finances? How it should be monitor?